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Wednesday, June 18, 2008


How to cut the price of gasoline

John McCain and George Bush say offshore oil drilling is the answer to the high price of gasoline. Actually George Bush assiduously avoided the words "offshore drilling" in referring to the subject; he kept talking about "access to the OCS" ("Outer Continental Shelf") because he knows the words "offshore drilling" are anathema to the public.

Here are two numbers to consider:

Oil company profits per gallon? $0.84. Fill up your tank with, say, 15 gallons? $12.60 profit to the oil companies, every time you fill up your tank.

Of course the other contribution to the price of gasoline is the price of oil. It's obvious that some of the current high price is due to U.S. foreign policy. We can't "uninvade" Iraq, but stopping the threats against Iran and Venezuela might well lower the price of a barrel of oil, though by how much I couldn't say. Some say that a significant portion of the current price of a barrel of oil is due to speculation, not "real" factors. I'm willing to believe that's probably true, though I don't have enough information to either confirm it or quantify it.

But for sure, there are very real ways to lower the price of gasoline in the short term. Offshore oil drilling isn't one of them.

As for whether lower gas prices (as opposed to lowered oil industry profits) are a good thing, I'll leave that to Calvin and his dad:

Calvin: Hey Dad, I'm doing a traffic safety poster. Do you have any ideas for a slogan?

Dad: Sure! "Cyclists have a right to the road too, you noisy polluting inconsiderate maniacs! I hope gas goes up to eight bucks a gallon!"

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